Carbon offset providers jockey for credibility

The carbon offset industry is trying to get itself regulated--for its own good.

At the Carbon Forum America conference in San Francisco on Tuesday, the Center for Resource Solutions announced a certification program for voluntary carbon offsets.

Called Green-e Climate, the program is meant to ensure the validity of carbon offset purchases. When a consumer buys a carbon offset, it represents an investment in a project to reduce greenhouse gas emissions, such as a wind farm or methane capture project.

A number of companies have emerged to provide these services which typically are small-scale investments for consumers who might buy and offset before taking a flight, for instance.

Businesses, meanwhile, can make very substantial investments. Intel last month made the largest corporate purchase of renewable energy certificates (RECs), representing 1.3 million megawatt hours of electricity.

The industry, however, has come under fire because offset vendors have been accused of investing in dubious projects or double-selling offsets.

The goal of Green-e Climate--as well as other certification programs--is to provide more oversight and verification.

"We believe the market needs independent oversight in order to grow," Green-e Climate manager Lars Kvale said in a statement. "The level of transparency Green-e Climate certification requires means that consumers will know where their offsets came from and have confidence that they are getting what they pay for. Building a credible voluntary offset market is an important instrument for combating climate change."

In another sign of the fledgling industry trying to gain more credibility, Carbon Offset Providers Coalition on Monday published its comments to the Lieberman-Warner Climate Security Act of 2008, one of several federal carbon regulation proposals.

Specifically, the coalition argued that polluters should be able to purchase offsets to meet emissions reduction targets.

"Economic analyses by the U.S. Environmental Protection Agency ("EPA") and others have shown that incentivizing a robust market in offset reductions (i.e., emissions reductions from diverse sources outside a mandatory cap) can dramatically reduce the overall cost to American taxpayers and consumers of meeting the goals of global warming legislation," the Carbon Offset Providers Coalition wrote to Sen. Barbara Boxer, the chairman for the Committee on Environment and Public Works.